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Online Application Still Down for UK Tax Regime

1 October 2014 by Devon Chappell

In the latest development with the impending, controversial taxation about to hit the UK online gambling industry, operators are now left wondering if regulators are waiting until the last minute to take their applications online. With little over two months to go until the new taxation policy is to go in effect, the online website for registration is not even operational yet. And many folks are now wondering if there is more to this delay than bad planning.

As it currently stands, internet-based casino operators will be required to start paying a stiff new taxation of 15% to HM Revenue and Customs (HMRC) on wagering, casino gaming and any remote gaming activities carried out by players/bettors who live in the UK, regardless of where those operators are based in the world. This is a major upset to operators based outside of the UK, who have not been required to pay any gambling taxes in the UK thus far.

HMRC has stated that casino operators already registered for taxation within in the UK will be auto-enrolled for the new 15% point of consumption taxation. For those operators looking to come aboard, transfer, or inquiry, HMRC said it would be contacting those businesses to get their details integrated into the new taxation scheme.

What is compelling right now is that online casino operators based outside of the United Kingdom and not currently registered for UK tax have indeed registered for the new taxation plan with HMRC. Leading up to the deadline, HMRC has stated that operators who are subject to the new tax regime but do not complete proper registration, face steep and potentially unlimited fines or the loss of their license altogether and will not be able to accept wagers from UK residents. But with the online registration not yet ready with less than two months (and one month for application) left until the deadline to apply, many are left wondering what gives.

The UK’s new point of consumption taxation is being met with great resistance in Gibraltar, where a formal complaint has been filed, sighting unlawful taxation under EU rules. Subsequently, several well-known online casino operators from the UK have threatened to pull up stake and remove their operations from the UK market if they are forced to pay the higher tax rate.

The point of consumption tax was created with a new regulatory and licensing framework for remote gambling in the UK. However, it is a separate tax.

Interestingly, even with the online registration site not yet underway, HMRC has stated that any applications need be submitted and/or completed more than one month before the deadline of December 1st for applicants outside of the UK, and more than two weeks before the deadline for those operators located inside the UK, EU, as well as various outlying UK territories, such as Alderney and Guernsey, Gibraltar, the Isle of Man.

There is quite some skepticism surrounding the online process availability with the respective deadlines swiftly approaching. In August, HMRC said that online registration would be available in early autumn. In its latest update since that time, HMRC the system will open “soon”, and that further instructions will be available at that time.

Nothing wrong with waiting until the last minute we suppose. We’ll just have to wait and see.

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